This blog is about struggles for the control of corporations. For the most part, I'll focus on public corporations headquartered in the United States, issuing securities according to the rules stipulated by the SEC in Washington and (typically) governing their affairs by the laws and judicial decisions of the state of Delaware.
My own prejudices are ... well, I think I'll let you work them out as we proceed day to day.

Wednesday, April 30, 2008

Temple-Inland, a manufacturer of corrugated packaging, will hold its annual meeting this Friday.

No fireworks are expected. This might be a good time, though, to reflect on the long-range effects of stockholder activism of the Icahn sort. For it was little more than a year ago that Carl Icahn was making a lot of noise about this company, with a plan to divide it into three parts, etc. Here's a news story from that era.

Before Icahn started talking up a proxy contest, Temple-Inland's stock was worth a price in the low 60s range. His interest helped push the price up to close to $80. After his Emily Latella "never mind" announcement, the price fell to $73.45.

Also at that time, an analyst for Banc of America said that the price was unlikely to return to the pre-Icahn range. Since then, the company has spun off two of its units -- a finance operation and a real-estate concern. What is left is worth $11.74 per share. And no, that isn't just because of the spin-offs. The three parts together aren't worth the pre-Icahn whole.

This would suggest that there is truth to a classic indictment of hedge funds and greenmailers: that they produce a short upward boost in price but that their activity is bad for a business as an ongoing concern.

Too small a data base, of course, but hey ... I'm a blogger, not a guru.

Tuesday, April 29, 2008

Berliner's rumor was rather cleverly crafted. It contained enough specificity of imaginative detail to make it appear that someone 'in the know' was talking.

Here is the i-m he was sending out:

ADS getting pounded - hearing the board is now meeting on a revised proposal from Blackstone to acquire the company at $70/share, down from $81.50. Blackstone is negotiating a lower price due to weakness in World Financial Network - part of ADS’ Credit Services Unit, as evidence by awful master trust data this month from the WFN Holdings off-balance sheet credit vehicle.

The whole incident does tend to reflect poorly on "efficient markets" theory, at least in any very strong form.

On the other hand ... if the EMH is understood on a day-to-day basis (rather than minute to minute) the incident may be educed in the theory's support. ADC did 'get pounded' by the rumopr that it was getting pounded -- yes. But the pounding only lasted for minutes, and at the end of the day the price was back about where it had started. Even before the company had had a chance to issue a denial that the meeting had ever occurred.

Congrats to the folks over at the WSJ blog for getting this story both quickly and accurately.

Third, let me ask a very naive sounding question. Why does exchange self-regulation seem so toothless? Is it really toothless, or is that a false impression? What happened to Mr. Berliner or his employers in terms of their ability to trade on the NYSE hereafter? The SEC's complaint makes no reference to any action by the NYSE itself on that point.

Why not? Hmmmm. The obvious answer is that it is easier to do nothing than to do something, just as in an industrial context it is easier to pollute than to install smokestack scrubbers.

But that obvious answer isn't, by itself a very good one. The problem with pollution is that it's an "external costs," -- the manufacturers with the smokestacks are naturally tempted to pass those costs on to the public at large. But the costs imposed by such disinformation campaigns as Berliner's AREN'T EXTERNAL. They are costs imposed upon some members of the exchange itself by other members thereof.

This should, logically, be the ideal case for self-regulation. Why didn't it happen? I have a theory (I always do) but I'll hold it for now. We'll be back to covering proxy contests in this space tomorrow. Its the height of that season.

Monday, April 28, 2008

The SEC has charged Paul Berliner, formerly of the Schottenfeld Group LLC, with securities fraud and market manipulation.

It claims (he neither admits nor denies -- though he has settled) that he intentionally spread falsehoods about Alliance Data Systems (ADS) while selling ADS short.

Some background. Last May, ADS -- a company that does something for retailers that involves processing their credit card transactions -- agreed to be acquired by The Blackstone Group, at a price of $81.75 a share. During the period between such an announcement and the actual consummation of the sale, the price of the target company often fluctuates, sometimes rising avove the bid price on speculation that the would-be buyer will have to improve its offer. Sometimes, on the other hand, the target company's price will stay at a discount below the bid price because there will be some skepticism in the market about whether the deal will go through -- whether, especially, the stockholders and the necessary regulatory bodies will sign on to it.

In fact, the ADS/Blackstone merger never happened. The reasons? that's in litigation. Blackstone says it was a regulatory problem -- the Comptroller of the Currency raised objections, because ADS owns a bank. [Actually, it owns two banks, but only one of them is under the regulatory authority of the Comptroller.]

At any rate, the merger was still pending in November, when the stock price for ADS went for its thrill ride, at the Red Flags Theme Park.

Enough background. The gist of the complaint is that during a five minute period in the early afternoon of November 29, Mr. Berliner sent instant messages to 31 other traders/securities professionals that Blackstone was twisting ADS' arms into accepting a lower stock price as part of the merger -- that it would acquire the company at only $70 a share.

When Berliner began disseminating this misinformation, ADS price was selling at $77 a share, so some (justified) skepticism that the $81.75 deal would ever go through was already priced into the stock. But, according to the SEC, what Mr. Berliner was i-m-ing around was simply false: Blackstone had not proposed a lower acquisition price, nor was the ADS board "now meeting" on the subject.

As the rumor spread, the stock price cratered. The intra-day low was $63.65 -- or 17% less than the pre-rumor value.

This enabled Berliner to cover his substantial short position and pocket a quick profit.

In consequence, the SEC brought this lawsuit in the federal district court in Manhattan, and simulatneously settled it. Mr. Berliner agreed to "disgorge" (I love that word) $26,129 in profits and interest, to pay a maximum third-tier penalty of $130,000, and to consent to the entry of an SEC order barring him from association with any broker or dealer.

There is more that might be said about this case, of course. I hope to say a bit of it tomorrow.

Saturday, April 26, 2008

You've worked hard for much of your life, you've built a company that (I'll suppose) retails shoes. It started off as a single store, and has become a chain.

Congratulations. I admire such a life. But what now ... a dynasty? You have a child or more, and I'll suppose they're young adults. Are you grooming one or more of them to take over when you retire?

Please don't, without considering alternatives. You can end up with a fellow who has no real interest in marketing shoes, presiding over the company because he believes it's his obligation to do so. And you'll probably be looking over his/her shoulder from your Florida condo. Not an optimal situation for either of you.

When you're ready to retire, go public. Hire the right advisers and prepare an initial public offering. If properly done, and given our assumption that you have a sound underlying business to sell, you'll get plenty of money for that condo and the lifestyle to go with it, or a second career if you prefer.

What about the kid? Give him a share of the IPO proceeds, rather than the business. Let him do what he thinks best with his life and the money. There are plenty of professional managers out there who aren't related to you, and the process of going public includes finding the right ones.

Just a thought. The kids prefer the cash. Almost always.

(This will count as what is usually my Sunday entry to this blog. You'll next hear from me on Monday.)

Wednesday, April 23, 2008

A story in today's WSJ tells us that since the SEC has allowed companies to use e-proxy rather than old-fashioned paper and ink proxy ballots, voting rates have declined.

The authors of the story seem unclear what the psychology here is. Possible explanations include the aversion of older shareholders to anything internet-driven. Presumably as they die off, (or as the more flexible of them catch on) the numbers will go back up.

Or it could be a pointless statistical fluke. Correlation isn't causation.

2. Biovail shake-up.

There's a new chief executive and a new chairman of the board at Biovail, the company that was once featured on Sixty Minites as an example of short-seller-driven stock price manipulation. Bill Wells is the new CEO, Douglas Squires the new chairman.

Also, Bill Bristow has left the board of directors, "effective immediately," the company said on April 21, "due to his ongoing personal relationship with Eugene Melnyk."

In the eyes of the present leadership, apparently, the company's earlier problems which I discussed in early March weren't the consequence of speculators and paid-for false research reports after all. They were the consequence of the flawed leadership of company founder Eugene Melnyk.

3. SEC to Grassley: Let it be.

At some point about three years ago the SEC was investigating the broker-dealer Bear Stearns over the way it priced and valued about $63 million of collateralized debt obligations. But last year the investigation was quietly dropped. I'd like to that that someone at the SEC simply decided that whatever Bear was doing wrong had turned out to be self-punishing given the events of last month. But the chronology doesn't really work out there, does it?

Senator Grassley doesn't want to let the matter go. On April 2, he wrote the SEC asking for information on their investigation.

SEC chairman Christopher Cox replied last week: “The commission does not disclose the existence or non-existence of an investigation or information generated in any investigation unless made a matter of public record in proceedings brought before the Commission or the courts."

Tuesday, April 22, 2008

CSX Corp., the railroad company involved in a heated political and legal dispute with the London-based hedge fund TCI, has set a date for its 2008 shareholder's meeting.

June 25, in New Orleans.

The TCI group (which also includes 3G Capital Partners Ltd.), will solicit proxies for an opposition slate of five nominees for the board.

That's not a takeover attempt, strictly speaking. There are twelve directors, and the board is unclassified -- in other words, all twelve are up for (re-)election in any given year. That the dissidents are only nominating five means that they'll be a minority (though just barely) even if all five of their nominees end up seated around that table.

This could mean either (a) they could only find five qualified nominees willing to put their names up for this purpose, or (b) they're seeking to give undecided stockholders a feeling of security and continuity by making of point of seeking only a minority position.

CSX held a conference call on April 16 to discuss its first quarter results. Looking through the transcript, I realize that one of the predictable problems faced by any railroad is that the contract prices for hauling are fixed for long periods of time -- these "legacy contracts" can lock in the prices for hauling coal for particular shippers for up to five years. That doesn't give the management a lot of room to respond to changes in their own costs.

This isn't a fight with which I'm familiar, so I won't pontificate about it just now. I'm just marking my spot -- this is something to watch in the days ahead.

Also, there's a fascinating passage about Carl Icahn and his general modus operandi in Steve Miller's new book.

Miller styles himself "the turnaround kid." He has served as the CEO of many troubled and/or bankrupt companies, including Federal-Mogul, WMX, and Delphi. His discussion of Icahn occurs in the chapter describing his tenure at Federal-Mogul. Here's a bit of it.

"Icahn was uniquely creative in his demands. He was impatient with the board's decisions and would bully us to do things his way....He's effective, I think, because people become so traumatized that they wind up suffering from Stockholm syndrome and will do anything to please him."

Sunday, April 20, 2008

Cayuga MBA Fund LLC, a market-neutral hedge fund run by students at The Johnson School, Cornell University’s business school, has announced that it posted a 2.56% return in the first quarter of 2008., a quarter that saw a loss of 4.79% for the HFRX Equity Hedge Index, and a loss of 9.44% for the S&P 500.

Sounds like a good report card. But this also sounds like Risky Business for a class project. Do they dance around in their underwear,like Tom Cruise? He went into the pimping trade, if I recall the movie. Whereas the young men and women (I'm guessing mostly men) involved in Cayuga tell us that one of their best-performing last quarter was in Devon Energy Corp. (NYSE: DVN) an oil and gas exploration concern that benefited from the rise in the price of natural gas in recent months.

Devon benefited, as well, from a move into the Canadian oil sands. These sands yield a heavier type of oil, now economical due to the rising price of crude.

There was a television comedy show, early in the "W" Presidency, called "That's My Bush." In one episode, there's a great deal of talk about two points (a) a White House aide is having an affair, and (b) the administration is considering a plan to increase domestic petroleum production.

At the end, one of the characters explains the connection to another -- and to us.

"Oil is a lot like sex. Its too messy to produce domestically for long, so its better for everyone if you just go out for it."

That's good, too, for the entrepreneurs who invest in both of those markets wisely. Yeah, Cornell!

Wednesday, April 16, 2008

I mentioned last week that SCSF Equities, a private-equity firm based in Boca Raton, Florida, now says that it wants to replace three of the members of the board of directors of Furniture Brands, of St. Louis, MO.

I also said that I'd say something more about one of their nominees for director, Alan Schwartz, a professor at Yale Law.

Their motive in having him along for the ride is clear enough -- his name gives some academic luster to their cause. "It isn't just about money, it's about the principle of the thing -- best practices in corporate governance."

His motive? Is he associated in terms of his academic career with any theory that this proxy fight might in turn illuminate?

A quick google search using his name (complicated a bit by the fact that the president and chief executive of Bear Stearns is named Alan D. Schwartz) turned up this: a paper on "Sales and Elections as Methods of Transferring Corporate Control" that argues that the Delaware Supreme Court has been transforming the market for corporate control, making hostile takeovers by sale more difficult, pushing would-be acquirers toward elections -- towards, in other words, proxy fights.

In the meantime, the challenge slate has only this morning filed some "additional definitive proxy soliciting materials" with the SEC.

The gist of the new materials: this proxy fight is about getting enough control on the board to sell the company. SCSF, the fund behind the challenge, writes: "The Company’s current Board of Directors has been acting in the best interest of all shareholders. These concerns are underscored by Furniture Brands’ continued deterioration in financial performance and the fact that Sun Capital believes the Board has failed to appropriately consider at least two credible value creating proposals to acquire the Company."

So my guess looks good. It appears that the SCSF and its affiliates (collectively "Sun Capital") are serving as the inside cat's-paw for a would-be acquirer. And they have brought Alan Schwartz into the mix -- or he has come into it -- because he is the author of a theory to the effect that the Delaware court's are forcing acquirers to use such cat's paws on the inside.

Tuesday, April 15, 2008

Joseph Brandon has resigned as chairman and chief executive of General Re.

This is part of the fall-out from a criminal prosecution. As my regular readers may remember (I discussed it here), a jury in Connecticut, in February, found executives of two reinsurance companies guilty of a scheme to defraud the shareholders of one of them.

Apparently, General Re agreed to assist the other company involved, AIG, in booking a transaction between the two firms in such a way as to overstate the size of AIG's loss reserves.

Brandon himself was not among those convicted, and hasn't been charged. But he was, as the saying goes, the captain of the General Re ship when the sailors misbehaved.

He may be responsible for more than inattentive captaincy, though. The Wall Street Journal said last week that prosecutors have been pressuring the mother company of General Re, Berkshire Hathaway, to show Brandon the door.

And the captain of the Berkshire Hathaway ship, of course, is the legendary Warren Buffett.

Weather might get unpleasant even in margaritaville in the weeks and months to come.

Monday, April 14, 2008

David Noh, a distressed-debt expert formerly with Merrill Lynch, has a new job at Citadel Investment Group LLC. This piques my interest chiefly because I've read of Mr. Noh in one of Joe McGinniss' "true crime" books.

Citadel announced this hire on Thursday of last week. And though Citadel is a Chicago based operation, Mr. Noh won't be leaving Hong Kong. He'll be the head of Asian Merchant Banking for his new employer.

Congrats to him. Now, on to why I care. At Merrill, Mr. Noh appears to have worked closely with the victim of the infamous milkshake murder Robert Kissel, who in 2003 was bludgeoned to death by his wife, after she had fed him powerful sedatives in a milkshake, thus eliminating the possibility of self-defense.

If I understand Joe McGinniss' book on the case, and if McGinniss has it right, Mr. Kissel was working on a big deal in the days just before his death -- Merrill Lynch was putting together a bid for the distressed-assets portfolio of the Bank of China.

Kissel was murdered on the very day that he was supposed to take part in a crucial conference call about this auction. His wife tried to make it into a missing-person's case, telling people "we had a fight and then he stormed out of our apartment and I haven't seen him since."

The problem with that, though, was that on the afternoon of that day, after drinking the milkshake but before it had taken its full effect, Kissel did speak to his associate David Noh on the telephone. "Noh wanted to straighten out a few details in advance of the seven-thirty conference call" McGinniss tells us.

That call didn't go well. Kissel didn't seem to be making sense, and Noh was concerned that he might be intoxicated. He said, "Listen Rob, I'm going to give you a couple of hours to clear your head." End of conversation. That was also the last time the two ever communicated.

And so it goes. I'll spare you further melodrama, except to stress the point that bugs me. I may be obsessive-compulsive but ... McGinniss never does tell us what happened to the Bank of China deal. Did Noh and the rest of the team at Merrill pull themselves together and proceed without him? Which institution ended up getting the B of C's distressed debts?

Inquiring minds want to know. So if anybody who reads this has an e-mail address for Mr. Noh at Citadel, please send him a link to this blog, and let him know I'm curious. What happened to that portfolio?

Thanks.

[May 29 Postscript. It has since come to my attention that Citi won that auction. I still think McGinnis should have covered this point.]

Sunday, April 13, 2008

Vanity Fair's current issue has Madonna on the cover, holding a globe. Some explanatory matter inside says the editors think she looks like a "sexy 21st century Atlas."

As Jon Stewart might say, "nnnnn ... not so much." The pose has her holding the globe not on her shoulders but a bit lower, literally against her spine, so that it appears that the globe is in the midst of an invisible stream that is about to wash her and it forward out of the frame of the picture, in the reader/viewer's direction.

But let's look into the magazine's contents. For this issue also contains an article by Michael Wolff, called The War on the Times. Wolff discusses recent challenges to the Sulzberger family's hegemony over the corporate structure of the NYT, challenges that I have also discussed on this blog.

For the most part, Wolff just seems mean-spirited on the subject, as if he believes that the Sulzberger-guided institution is one of enormous value to the public welfare, and he can best serve that welfare by bad-mouthing real or potential threats thereto.

"The folks at the threatening hedge funds ... certainly have no legitimacy beyond their money. (Besides waging nuisance proxy fights, and having founded a sputtering dotcom company, Galloway, the front man for the charge, seems, mainly, to teach a business-school class at N.Y.U.) The Times's initial reaction was to treat them with the contempt they seem to deserve."

And much more in that line.

What kind of "legitimacy" does one need to own an interest in a newspaper? And is teaching a business-school class at the Stern School of Business, New York University, some kind of resume stain?

Galloway's dotcom company, RedEnvelope (OTC: REDE) has had its "sputterings," but has proven more resilient than many of the other species of that particular genus.

Galloway didn't seek to takeover the Times. He sought a voice. And he won that particular fight, getting a seat on the board. Will he be a destructive force from within, as Wolff seems to suggest? Why would he do that? because he thinks he has too much money?

The whole thing doesn't make a lot of sense. But hey, that's show biz.

Wednesday, April 9, 2008

1. Japan's trade minister, Akira Amari, wants to block the London-based hedge fund TCI from buying up to 20% of the equity in the country's leading electricity wholesaler.

TCI now owns 9.9% of the company, known informally as J-Power, because 10% is the cap beyond which acquisitions in certain industries deemed essential to national security require government approval in that country.

Mr. Amari said he doesn't believe his stand should be taken as any indication that Japan is closing itself to foreign investment. "J-Power is involved in a nuclear power plant project and operates power lines linking Japan's four major islands; all these could affect public order and daily life."

2. The annual meeting of Motorola this year will come off early next month without a proxy fight, now that the company has patched things up with investor Carl Icahn.

Icahn's taken a beating on MOT's stock price of late. His SEC filings indicate he's paid an average of $14.41 a share for the 144.56 million shares of the company he owns. The market price at the close of business yesterday was $9.49. So let's break out the calculator. A loss of $4.92 in the value of each share, times 144.56 million? that adds up to a loss of more than 711 million. Pretty soon, even for Icahn, you'll be talking real money.

Of course, that's only a paper loss. Icahn now has representatives on the board, and he hopes to introduce changes that will turn around the recent price slide.

3. SCSF Equities, a private-equity firm based in Boca Raton, Florida, now says that it wants to replace three of the members of the board of directors of Furniture Brands, of St. Louis, MO.

Their three nominees are: T. Scott King; Ira Kaplan; Alan Schwartz. Mr. King is the managing director of Sun Capital Partners Inc., which is the parent company of SCSF. Ira Kaplan is the barely-retired CFO of Claire's Stores Inc. The surprise in this list, the one that makes me sit up and take notice, is Alan Schwartz.

Schwartz is a distinguished academic student of corporate governance. He's been a professor at Yale University since 1987 -- teaching both at the law school and at the management school there. What's he doing in this fight?

We may try to figure that out together next week, fellow spectators. See ya Sunday.

Tuesday, April 8, 2008

W.R. Grace & Co., a Maryland-based specialty-chemical company, said yesterday that it has put $250 million into a trust fund to distribute among people who have been injured by asbestos contamination.

The fund has been created as part of a settlement with the tort lawyers. Further, it will receive cash and stock under separate litigation settlements with two companies that got into liability trouble as a result of buying assets spun-off from W.R. Grace: Sealed Air Corp. and Fresenius Medical Care Holdings Inc.

This settlement is the latest evidence that the world can wag in its own way quite well, without central planners, once cries of "global crisis" are set aside, efforts at a global solution are set aside as well, and the piecemeal efforts have time and space to bear fruit.

If it sounds to my regular readers that you've read this before ... you have. I said much the same thing in January, in reaction to a similar bit of news. In January, Federal-Mogul of Michigan, a company that like Grace, had entered bankruptcy court protection largely because of its asbestosis liabilities, emerged from that umbrella re-organized. Here's a link.

Grace is still under the umbrella. Indeed, it hasn't even worked out a plan of reorganization yet, though it hopes to have one ready by the end of this year.

Monday, April 7, 2008

Last month, the railroad company CSX sued one of its large shareholders, the hedge fund TCI, claiming that it hadn't properly disclosed the nature and extent of its stake in the company.

So Friday, April 4, TCI filed its answer to that complaint, along with its counterclaims.

The answer is, simply: Yes, we did too disclose. Or, in language sounding a bit less like it comes from a playground: "All of the material information regarding TCI's investment in CSX is public," referencing in particular the Hart-Scott-Rodino notice that TCI sent CSX more than a year ago, and that CSX in turn included in its SEC filings.

The most newsworthy of the counterclaims is that CSX and its chief executive, Michael Ward, have engaged in insider trader, through the mechanism of the timing of certain stock grants to executives eleven months ago.

Sunday, April 6, 2008

MS chief executive Steve Ballmer is getting restive, as this letter to the Yahoo board of directors indicates.

He is giving them three more weeks to agree to his terms, or else.

Or else ... what? "we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo! board."

He also wrote that his proposal reflected a "substantial premium" over market price, because he had hoped for a friendly transaction. If there has to be a proxy shoot-out, that premium will come down.

That sounds like bluster to me. If he does take the matter directly to the Yahoo shareholders, he'd likely try to woo them by increasing the price. At his most miserly, he'll keep it where it is. Cutting the size of the offer he's already put on the table sounds like a losing tactic. Accordingly, it also sounds like an empty threat.

Wednesday, April 2, 2008

The value of a stock should logically be the value of what a buyer thinks will be the stream of dividends it will generate into the indefinite future, discounted to present value.

Simple example: suppose I buy $100 of stock. I had other choices. I could have just put that money into an interest-bearing bank account. At (let us say) a 5% annual rate of interest. In that case, I might have received an income stream from this investment of $5 a year forever.

Why would I take money out of such an account to buy a share of stock unless I expected it to be at least as valuable as the same money was within the account? If there is no good reason, then presumably we're on firm ground in using that measure of value: the income stream I expect the stock to produce analogous to that safe $5 a year from the bank, IS its value.

That brings us back to the stream of dividends. Now, if a stock is increasing rapidly in value (some people will tell you) it isn't an "income stock" but a growth stock, and you as an investor shouldn't necessarily expect dividends.

This, to me, does not compute. If I own the stock only for its resale value, I'm betting that it will be worth a lot to the fellow after me. But what would it be worth to him, except its expected dividend stream? Somewhere we have to get a dividend stream, or else the value of a stock is just the arbitrary result of a "greater fool" theory.

If I was foolish enough last year to buy a pet rock, I can make it worthwhile if I find a greater fool than I, next year, and sell it to him for more. Growth stocks are either stalled income stocks (hoping to get to the dividend creation in the future) or they're pet rocks sold to ever greater fools.

Tuesday, April 1, 2008

The complaints that have led some shareholders to contest two seats on the board of the office-supply company, Office Depot, ahead of an upcoming annual meeting, provided me with the gist of yesterday's entry here.

ODP has been doing rather poorly of late when compared with its rival, Staples. I suggested yesterday that just looking at the stock price move in isolation might be misleading -- one should look at dividend policy, too.

Although that's a sound general rule, it doesn't help the case for ODP's incumbent management any. This is from ODP's website: "The Company has never declared or paid cash dividends on its Common Stock and does not intend to pay cash dividends in the foreseeable future."

Staples, on the other hand, just last week paid a cash dividend of $0.33 per share. It has been in the habit of paying dividends each March, like giving away an Easter egg, and this year's was larger than that of either of the two eggs. Though that may sound flip of me, I'm a very pro-dividends kind of guy, and I'll write something more on that point tomorrow.

So if ODP is going to justify their underperformance vis-a-vis Staples, it won't be on the basis of the dividend stream! What might they say, though? Well, as it happens, ODP did send out a letter to its shareholders yesterday making its case.

It didn't say anything at all about the ODP/Staples comparison. It did acknowledge recent troubles, but qualified that with the comment that there already has been a lot of turnover in board membership lately. There is no need for the dissidents' proposed "fresh faces," then, since the incumbents are new enough to still be fresh.

The statement also discussed in general terms the ODP turnaround plan these fairly-fresh faces have produced and should be left free to execute. Slowly growth to enhance focus, store remodelling, loyalty programs, revisions in both catalog and on-line marketing, etc.

There's nothing in it that bowls me over. If I had this stock, I'd be ticked off. But would I fight, or would I just sell it. That's always the question in these situations, isn't it?